Business

IIE DIGITAL DESK :  April 21: Investors looking for the next high-growth opportunity in the Indian equity market may find strong potential in the transmission and distribution (T&D) sector over the coming years, according to a recent analysis by Motilal Oswal Financial Services. The brokerage report suggests that this capital-intensive segment could remain in focus for the next several years due to rising infrastructure demand, increasing power consumption, and large-scale energy transition projects.

The report highlights that rapid growth in capital expenditure, a rising order book for infrastructure companies, and the expansion of high-voltage direct current (HVDC) transmission projects are expected to drive sustained momentum in the sector. Analysts believe these factors are creating a strong structural growth story for transmission and distribution-related companies in India.

India’s domestic power demand is increasing steadily, supported by industrial expansion, urbanisation, and electrification of transport systems. At the same time, global demand trends are also favourable, particularly in areas such as renewable energy integration, expansion of data centres, and growing requirements for electric vehicle charging infrastructure. These developments are expected to significantly boost the need for efficient and upgraded power transmission networks.

Motilal Oswal further notes that companies operating in this space are likely to witness strong earnings growth between financial years 2025 and 2028. Based on this outlook, the brokerage has issued positive ratings on select stocks, identifying them as potential beneficiaries of the ongoing sectoral expansion.

Among the key stock recommendations, CG Power and Industrial Solutions has been assigned a target price of ₹900. Similarly, Atlanta Electricals and GE Vernova have also been given target prices of ₹900, with Buy ratings reflecting strong growth expectations. In addition, Siemens Energy has been highlighted as another attractive investment opportunity within the sector.

The report acknowledges that valuations in some of these stocks may appear elevated at present. However, it argues that the anticipated earnings growth, supported by large order inflows and export opportunities, is likely to justify current pricing levels over the medium to long term.

India’s National Electricity Plan is also expected to play a crucial role in shaping the sector’s future trajectory. The plan envisions significant investment in power transmission infrastructure, which is already beginning to translate into large-scale project orders and execution activity across the industry. Renewable energy integration into the national grid is further accelerating demand for advanced transmission systems.

Analysts believe that the sector is currently in the early stages of a major capital expenditure cycle, with initial momentum already visible. Over the next few years, continued investments in infrastructure and energy transition projects are expected to sustain this growth trend, making transmission and distribution one of the key sectors to watch in the Indian stock market.